No Longer Optional: The G20 and Financing Sustainable Development

November 13, 2015
Turkey's President Recep Tayyip Erdogan delivers his address to the G20 Energy Ministers during their summit in Istanbul, in October. (Kayan Ozer/Presidential Press Service, pool via AP)

With the 2015 G20 Antalya Leaders’ Summit about to kick-off, the question remains whether the financing of sustainable development will be high on the agenda (if tackled at all)? G20 Summit agendas are notorious for being hijacked by global security concerns or regional civil crises; moving away from the traditional mandate of tackling global economic governance. With the exception of the 2009 G20 London Summit that tackled major global economic issues following the 2008 Financial Crisis. The 2015 G20 Antalya Summit is focusing on how to increase global growth, which is building on the same messaging prevalent in comments by the Managing Director, Christine Lagarde at the IMF Annual Meetings in Peru, Lima this past October. A focus on the financing of sustainable development and the Sustainable Development Goals (SDGs) in infrastructure development is possible at the G20. However, it remains uncertain if the growing migrant crisis will take the spotlight in the coming days as the leaders assemble in Turkey.

The G20 may be traditionally a forum for discussion of global economic cooperation but arguably sustainable development falls into that category. It is a worldwide issue that will have negative economic impacts without adaptive infrastructure development over the coming years. Some of the SDGs have already been discussed at previous G20 Summits, predating their existence as international goals. For example, in 2012 the G20 Climate Finance Study Group (CFSG) was established by the request of Finance Ministers and was adopted by Leaders in the Los Cabos Summit, in June 2012. The mandate of the CFSG is “to consider ways to effectively mobilize resources taking into account the objectives, provisions and principles of the UNFCCC.”[1] The CFSG is aligned to SDG 13 to take urgent action to combat climate change and its impacts. The goal aims to mobilize $100 billion annually by 2020 to address the needs of developing countries and help mitigate climate-related disasters. The CFSG advises G20 Finance Ministers directly to mobilize funding for these purposes and can assist in reaching this goal.

At the 2014 G20 Brisbane Summit, the number one policy option identified by the CFSG to Finance Ministers was financing for adaptation. The recommendations included providing public finance for adaptation, raising public awareness of climate change risks, regional insurance mechanisms for risk management, and high quality investments in infrastructure. In addition to public finance, the CFSG recommended the promotion of alternative sources and approaches to climate finance including: risk sharing tools to overcome barriers for investment, making climate change credit lines available, increasing public-private partnerships, further development of the market for green or climate bonds, and supporting industries that generate sustainable resources.

CIGI’s Global Economy (GE) program, through the Think20 (T20), argues the financing of sustainable development ought to be an agenda item for the G20. Earlier this year the T20 convened in Ottawa to discuss the 2015 G20 Antalya Summit leading to the inclusion of the subject in the resulting policy brief ‘Prioritizing International Monetary and Financial Cooperation for the G20: Views from the T20.’ Building on his presentation in Ottawa at the T20 meeting, CIGI Senior Fellow Olaf Weber discussed the topic in a commentary, ‘Should Climate Finance Be Integrated into the G20 Agenda?’ As GE looks past the current Summit to China’s 2016 presidency, the financing of sustainable development will remain an area of focus for upcoming research and T20 activities.

The CFSG is an example of how the G20 is already being used as a forum to promote the financing of sustainable development. The study group has already started the dialogue by focusing on the importance of the public sector to provide financing and tackling the barriers to increasing private sector involvement and investment for climate adaptation. This is another step on the road to COP21 Sustainable Innovation Forum in Paris later this year. Now it is left in the hands of the G20 Finance Ministers and ultimately the G20 Leaders to address this important agenda item and give it the attention that is no longer optional.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.

About the Author

Alisha Clancy joined CIGI as Manager for the Global Economy program in October 2013. In this role, she manages all program activities, events, publications, partnerships, and stakeholder relations across all Global Economy research themes.